The trends that have unfolded in the apparel sector over the last couple of years appear to be playing out in the jewellery sector, albeit at a much faster pace following the pandemic, writes Cathie Osborne, CEO and founder of Retaissance.
Consequential changes are underway in both consumer behaviour and the retail landscape itself. How could these trends affect the future of jewellery and what can we do to prepare?
Recent McKinsey research shows trends that shaped our adjacent industry, apparel, are becoming evident in the jewellery industry as well: internationalisation and the growth of story-driven independent brands, as well as a reconfigured channel landscape (hybrid consumers).
The world is becoming a much smaller place with retailers, manufacturers and consumers reaching a truly global market.
Today, the jewellery industry is still primarily local with home-grown brands being the staple within the majority of independent stores.
Gen X, millennial and Gen Z consumers have global tastes that can be seen clearly on the premium retailers and multi-brand sites such as Galleries Lafayette, Nordstrom, Net-a-Porter, Farfetch, Matches and Harvey Nichols.
Branded items already account for 60% of sales in the watch market while branded jewellery accounts for only 20%, with the increased spending power of the millennial and Gen Z consumer indications showing the branded segment will account for 30-40% of the market by 2025.
“the jewellery industry is still primarily local with home-grown brands being the staple within the majority of independent stores”
Branded jewellery appeals to the emerging market consumers, young consumers who turn to brands as a means of self-expression and self-realisation, and conspicuous consumers who wear branded jewellery to show off status or acquired wealth.
Every jewellery retailer should seek to strengthen and differentiate its brands through unique, distinctive and global designs to really consolidate the next generation of consumers.
More and more jewellers are focusing on a curated jewellery portfolio of well-known luxury brands as well as up-and-coming designers that are sold in the top stores globally.
The reconfiguration of the channel landscape is also following suit in the jewellery sector with apparel and department stores adding new brands and products as an online-only option.
Known as vertical brand extensions or line extensions, these allow a retailer to introduce fresh jewellery brands with a large fan base of followers.
According to the McKinsey survey, two thirds of luxury consumers say they engage in online research prior to an in-store purchase.
Digital sales in jewellery are expected to plateau at +29% following the pandemic.
“Retailers will need to attract footfall and compete with online offerings”
With digital and physical channels strategically integrated, retailers can develop new revenue streams, decrease customer friction, improve customer retention and gain access to better data to drive more effective business decisions.
Another fresh approach currently being introduced in select independent jewellers in the UK is new product lines from different categories that bring additional choice to the consumer and additional revenue to the retailer – premium handbags, home, gift, skincare and professional leather goods are prime additions.
Retailers will need to attract footfall and compete with online offerings. This will require expanding and accelerating the presence of innovative products and brands.
Buyers will need greater, faster access to more brands, curated information to distinguish high-potential brands amongst available offerings, and intermediaries to efficiently integrate more and smaller brands onto their internal systems.